<a href="https://bitcoinworld.co.in/asic-initiates-legal-action-against-bit-trade-over-crypto-margin-trading-product/" title="ASIC Initiates Legal Action Against Bit Trade Over Crypto Margin Trading Product" rel="noopener noreferrer nofollow"></a> 
The Australian Securities and Investments Commission (ASIC) has launched legal proceedings against Bit Trade, the provider of the Kraken cryptocurrency exchange in Australia. ASIC alleges that Bit Trade failed to adhere to design and distribution obligations for one of its trading products, specifically its margin trading offering. 
According to ASIC’s statement released on September 21, the financial regulator contends that Bit Trade did not make a target market determination before making its margin trading product available to Australian customers. Design and distribution obligations are legal requirements imposed on firms that offer financial products in Australia. These obligations mandate that companies design financial products tailored to meet the predetermined needs of customers and distribute them through a targeted approach. 
ASIC alleges that since introducing these obligations in October 2021, at least 1,160 Australian customers have utilized Bit Trade’s margin trading product, resulting in a collective loss of approximately $8.35 million (12.95 million Australian dollars). 
The regulator claims to have notified Bit Trade of its failure to comply with these obligations in June 2022. Despite this notification, Bit Trade allegedly offered the product without fulfilling the necessary determinations. 
Bit Trade’s margin trading product, described as a “margin extension” service, allows customers to obtain credit extensions of up to five times the value of the assets they use as collateral. ASIC, however, categorizes this product as a “credit facility” as it provides customers with “credit for use in the sale and purchase of certain crypto assets on the Kraken exchange.” 
ASIC’s Deputy Chair, Sarah Court, emphasized that these legal proceedings should remind the cryptocurrency industry that financial products are subject to regulatory scrutiny to ensure compliance with consumer protection laws in Australia. She stated, “ASIC’s action should be a reminder of the importance of complying with design and distribution obligations to ensure that financial products are distributed to consumers appropriately.” 
This legal action highlights the growing regulatory scrutiny faced by cryptocurrency companies worldwide, as regulators aim to safeguard investors and ensure compliance with existing financial regulations. 
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The post <a rel="noopener noreferrer nofollow" href="https://bitcoinworld.co.in/asic-initiates-legal-action-against-bit-trade-over-crypto-margin-trading-product/">ASIC Initiates Legal Action Against Bit Trade Over Crypto Margin Trading Product</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://bitcoinworld.co.in">BitcoinWorld</a>.

ASIC Initiates Legal Action Against Bit Trade Over Crypto Margin Trading Product

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